15 October 2003

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Make or break time for PBS

- "It has come to me to bell the cat" – Austin Gatt

By Kurt Sansone
Government is ready to close down the public broadcasting service if no agreement on reforms is reached. This was the clear message delivered yesterday by Investments Minister Austin Gatt, who also admitted that every government administration since the 1970s helped contribute to the financial black hole.
"I will not go on blaming this person or that. Everybody has contributed to the problem and now it has come to me to bell the cat. We have to take action now," Dr Gatt told journalists yesterday.
In no uncertain words, the minister said the survival of the public broadcasting station depended on a reduction of around 130 employees, an overhaul of the current work practices and a more extensive outsourcing policy.

During the press conference Dr Gatt said that the plan outlining the reforms was presented to the General Workers’ Union yesterday and discussions are expected to start next week.
Asked whether any timeframes have been stipulated, Dr Gatt said that at this stage no timeframes have been set but if the union is ready to play ball the reforms will be put in place by year’s end.
The minister said that as of 1 January 2004 PBS won’t be responsible for the collection of TV licences, revenue that will instead pass on to the Wireless and Telegraphy department.
Dr Gatt said that government would still subsidies PBS to the tune of Lm0.5 million. "Government’s funding won’t be unlimited. PBS will have to live with Lm0.5 million or die, which puts a greater onus on management to ensure that the rest of the money comes from advertising sales," Dr Gatt said.
The road map for reform, as Dr Gatt called it, envisages that PBS will remain the best broadcasting station. "The difference will be that PBS will now have to take note of the bottom line, something, which has never been adhered to," Dr Gatt said.
Drawing on his experience at NET TV, Dr Gatt said that a television station catering for a population of 400,000 does not require more than 50 employees. "The reality is that despite outsourcing a number of programmes over recent years, PBS still lost money because it retained its massive workforce."
Responding to a question from The Malta Financial and Business Times about whether government was ready to forego a public broadcasting station, Dr Gatt insisted that government was ready to outsource the public broadcasting obligations that arise from the Constitution and the broadcasting law if PBS were to be closed down.
The minister reiterated that the situation was precarious with government subsidy at PBS being higher per capita than that at the drydocks.
Government forks out a subsidy of Lm12,000 per employee at PBS while the corresponding figure at the drydocks is almost Lm10,000.
And the figures at PBS clearly point towards a financial black hole. The wage bill including overtime and allowances is Lm1.5 million, which is double the amount of revenue from advertising sales. External contributors are paid a further Lm0.25 million while overheads amount to Lm0.5 million. Over three years the national station lost Lm7.2 million and the outlook for this year is no different.
PBS currently employs around 184 people, with seven executive posts and countless other managers. In Dr Gatt’s words, "the station has too many chiefs and too many indians."
For the first year of reform government is agreeing to absorb a loan of Lm1.5 million, which has burdened PBS since 1994. Government is also committed to make a capital investment of Lm450,000 over three years to furnish the company with the latest equipment.
Dr Gatt also warned against work practices that do not make sense citing as an example the situation where employees do not operate new equipment with the excuse that they do not know how to use it.
Present for the press conference among others were PBS chairman Michael Mallia and the station’s CEO Andrew Psaila.

Planned reforms

- Workforce reduction from 184 to 50
- Early retirement schemes will be introduced
- From 1 January 2004 PBS will no longer receive revenue from TV licences
- Government subsidy to total Lm0.5 million
- PBS will have to reform its advertising and marketing department to raise enough revenue to be profitable
- Outsourcing of programmes will be further encouraged but PBS will be pro-active in determining its programming needs
- News will remain an in-house production


Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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